A mortgage is taken out for $80000. It is to be paid by annual installments of$5000 with the first payment being made at the end of the first year that the mortgage is taken out. Interest of 4% is then charged on any outstanding debt. Find the total time taken to pay off the mortgage. Please explain in details.

Note by Md Shajedul Ananda
4 years, 4 months ago

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16 years

- 4 years, 4 months ago

Sorry to say the correct answer is 25 years. But I don't know how to do it though. It's from a book that's why I know the answer.

- 4 years, 4 months ago

Yr Installment Interest Balance(running) 1 5000 3000 75,000 2 5000 2800 70,000 3 5000 2600 65,000 4 5000 2400 60,000 . . . 15 5000 200 5,000 16 5000 0 0 Total 80,000 24,000

- 4 years, 4 months ago